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Deemed dividend

Riddhi Lathiya (student) (95 Points)

12 November 2018

According to 2(22)(e), What is taxable as deemed dividend ?? either profit of company or amount of loan/advance received?

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Manish Manu (198 Points)
Replied 12 November 2018

the amount of loan/advances to the extent of accumulated profit

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Riddhi Lathiya (student) (95 Points)
Replied 12 November 2018

Means whichever is less?

Manish Manu (198 Points)
Replied 12 November 2018

Yes, whichever is les

Uday Rathi (133 Points)
Replied 12 November 2018

Payment by closely held company as loan or advance to:
a) its shareholder holding 10% or more or
b) any concern in which shareholder is substantially interested
c) any otherperson on behalf of the shareholder

to the extent of accumulated profits of the company calculated on the date of loan/advance shall be deemed as dividend in the hands of shareholder.(exmept u/s 10(34))

Company shall pay CDT @ 34.944%

Riddhi Lathiya (student) (95 Points)
Replied 13 November 2018

thnx for the details

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Nitesh bind (Student CA Final ) (12692 Points)
Replied 14 November 2018

@ Uday Rathi Deemed Dividend Under Section 2(22)(e) is taxable in Hands of SHAREHOLDERS and not in hands of Company. Company pay DDT on Dividend covered under Section 2(22)(a)/(b)/(c)/(d) but that does not cover Sec 2(22)(e).

And I think Normal DDT paid by company is also @ 20.9248% after Grossing Up not 34.944%.

Please correct me if I'm wrong.

Thanks.

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